Morgan Stanley Remains Cautious on CF Industries (CF) on Mixed Near-Term Outlook

CF Industries Holdings Inc. (NYSE:CF) is one of the 20 undervalued momentum stocks that are taking off. In a recent update, Morgan Stanley analyst Vincent Andrews reiterated a Hold rating on the company, maintaining his $80 price target.

One of the key points in the report is CF’s outlook on global ammonia markets. The company expects a tightening supply-demand environment through 2029, which could be favorable for pricing. However, Andrews points out that this potential upside might be partially offset by the shutdown of less efficient European plants, which could help ease the supply pressure.

An engineer wearing safety gear handling an anhydrous ammonia storage tank.

CF also stands to benefit from its growing focus on low-carbon ammonia. The company believes that it can charge a premium in this area, which could help it to grow EBITDA over time.

At the same time, Andrews notes that CF’s mid-cycle EBITDA guidance and ongoing investments, particularly the significant capital commitments for the Blue Point project, suggest a more cautious near-term outlook. While a partnership with Linde helps the company lower its capital expenditure requirements, the project’s scale and its financial impact remain key variables for investors to consider.

CF Industries Holdings Inc. (NYSE:CF) engages in the manufacture and sale of hydrogen and nitrogen products, primarily ammonia and ammonia-based fertilizers, for energy, fertilizer, emissions abatement, and other industrial activities.

While we acknowledge the potential of CF as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.